Natural Gas Prices Could Drop By Up To 50% With New Regulatory Reform Resumed By Paulo Guedes

Written by Paulo Nogueira

Published on 24/03/2019 at 20:48

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Brazil’s President Jair Bolsonaro Government Will Resume the Regulatory Reform Process That Was Interrupted This Year, and Gas Prices Could Drop by Up to 50%, Says Minister

The Brazilian government intends to relaunch a regulatory reform for the country’s natural gas sector before the end of the second quarter of the year. The natural gas sector in Brazil Is Viewed as Underdeveloped and Over-Regulated, and the reforms are considered vital for the country to explore its commercial resources’ full potential. Operators complain that the abundant natural gas associated with offshore pre-salt fields can sometimes act as an impediment to field development in the absence of well-regulated reforms.

The previous government under President Michel Temer held extensive consultations before the regulatory reform program called “Gas for Growth,” but the political agenda was shaken by domestic political issues, including corruption allegations against Temer that date back to before he took office.

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Why Is Brazil’s Natural Gas So Expensive?

Marcelo Gauto, Specialist in Oil, Gas, and Energy, states that the basic reasons are: 35% of the gas is imported and our gas production is predominantly offshore, with high logistics costs. In 2018, distributors purchased gas from Petrobras at prices ranging between US$ 6.0 and US$ 8.0 per MMbtu FOB and resold it between US$ 10.7 and US$ 19.0 per MMbtu to the end consumer. The break of Petrobras’ monopoly on gas infrastructure, which many experts point to as a solution to lower prices, is just the tip of the iceberg.

Natural Gas Prices Could Drop By Up To 50% With New Regulatory Reform Resumed By Paulo Guedes

Brazil’s President Jair Bolsonaro Government Will Resume the Regulatory Reform Process That Was Interrupted This Year, and Gas Prices Could Drop by Up to 50%, Says Minister

Why Is Brazil’s Natural Gas So Expensive?

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Natural Gas Prices Could Drop By Up To 50% With New Regulatory Reform Resumed By Paulo Guedes

Brazil’s President Jair Bolsonaro Government Will Resume the Regulatory Reform Process That Was Interrupted This Year, and Gas Prices Could Drop by Up to 50%, Says Minister

Why Is Brazil’s Natural Gas So Expensive?

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